Gas prices reached new highs and oil soared on Wednesday, sending prices at UK petrol pumps to a new high as Russia’s escalating invasion of Ukraine continues to cause turmoil in the energy markets.
The price of a barrel of Brent crude oil reached nearly $114, its highest level since early July 2014, despite a decision by the US to release, with its allies, about 60m barrels from their strategic reserves in an attempt to stabilise global energy markets.
Gas prices also rose, with the Dutch April gas contract hitting a new record high of €185 per megawatt hour, the UK’s rising almost 40% to 398p a therm in morning trading, not far from the all-time high above 450p seen in late 2021.
The increases threaten to exacerbate a cost of living crisis that has prompted predictions of £3,000-a-year energy bills for households in Britain, with rising energy prices set to pile further pressure on already soaring inflation.
Russia continues to pump supplies into Europe but the war in Ukraine risks near-term disruption and is increasingly isolating the world’s second-largest producer of oil and gas from global energy markets.
BP, Shell, ExxonMobil and the British Gas owner, Centrica, have vowed to unwind billions of pounds worth of Russian ties in recent days.
On Wednesday, the organisers of the annual World Energy Congress, due to be held in Russia, looked poised to cancel the event as sponsors reviewed their participation.
Despite the soaring price, the Opec oil cartel and its allies are likely to stick to modest plans for output rises when they meet later on Wednesday, officials have said. Increased production typically relieves pressure on global prices.
The average cost of a litre of petrol at UK forecourts was at a fresh high of 151.67p on Tuesday, up from 151.16p on Monday, according to the data firm Experian Catalist. The average cost of a litre of diesel is also at a record high, reaching 155.23p.
RAC’s fuel spokesperson, Simon Williams, said: “If oil does stay at this level, the journey to an average unleaded price of 155p may be far too quick.”
This year’s World Energy Congress, a regular meeting of politicians and energy industry luminaries, is scheduled to be held in St Petersburg in October. However, with Russia increasingly seen as a pariah on the political stage as well as among energy companies, it is thought to be on the verge of being cancelled.
The World Energy Council, a registered charity, chooses the location of the congress every year based on votes from its 77 member states, including the US and Russia. Representatives of those countries are meeting this week to decide whether the triennial event can go ahead.
In previous years the conference has been sponsored by London-based corporations, including BP and the accounting firm EY.
EY told the Guardian: “The support and participation of EY at the 25th World Energy Congress in St Petersburg is under review and we cannot comment further at this stage.”
BP said it had not planned to sponsor the St Petersburg event.
The website for the St Petersburg event, bearing the tagline “energy for humanity”, displays a list of sponsors made up solely of Russian companies. It still claims to be expecting 18,000 attendees form 150 countries, including 70 government ministers.